Gartner: Now is the time to capitalise on recession-proof IT spending

Leading analysts have advised businesses to continue to spend heavily on IT in 2023, despite economic challenges, saying the investment is likely to be "recession-proof".

Some IT leaders will continue to invest heavily and view current economic conditions as a prime opportunity to build new, more resilient revenue streams, enhance organisational processes and position themselves as more relevant to their customers.

Others will fail to capitalise on this opportunity. Those who adopt a more conservative approach to IT spending and ‘hunker down’ in the year ahead could find themselves at serious risk of falling behind competitors.

The comments were made by John-David Lovelock, distinguished VP analyst at Gartner, to IT Pro ahead of the unveiling of the consultancy's research on Wednesday. It predicted that IT spending will increase by 2.4% from 2022 to $4.5 trillion in 2023.

This forecast follows the previous quarter's prediction that IT spending was expected to increase by 5.1%, highlighting concerns over spending as the global economy braces for an impending recession.

Inflation and economic disruption have rapidly eroded consumer purchasing power, Gartner noted, while device spending is also down among enterprises. But despite challenging conditions, overall IT spending is expected to remain strong.

The software and IT services segments, for example, are projected to grow 9.3% and 5.5% respectively across 2023.

In particular, Gartner predicted that the IT services market will continue to grow as organisations seek to bring in outside staff to bolster support and implementation of IT projects.

This could see consultancy spending reach $264.9 billion in 2023 – a 6.7% increase from the year previous.

John-David Lovelock, distinguished VP analyst at Gartner, said that while inflation has “devastated” consumer markets, many enterprises will continue to increase spending on digital business initiatives.

“A turbulent economy has changed the context of business decisions and can cause CIOs to become more hesitant, delay decisions or reorder priorities,” he said.

“We’ve seen this in action with the reshuffling taking place among some B2B companies, especially those that overinvested in growth. However, IT budgets are not driving these shifts, and IT spending remains recession-proof.”

‘Recession-proof’ IT spending

Lovelock said that IT spending outlooks for the year ahead should inspire confidence among senior technology leaders.

“Overall, I think enterprise IT spending in 2023 is going to be recession-proof,” he said. “There’s no doubt about it.”

Lovelock warned, however, that as businesses seek to traverse difficult economic conditions, there is a serious risk that a "chasm" emerges between businesses seeking to invest their way out of a recession and those seeking to hunker down and weather the coming storm.

“The split between the companies that will investment heavily in IT and those that don’t is going to be higher this year than ever. The polarisation in the market between the ‘IT buyers’ and the ‘IT hesistants’ is going to get wider than we’ve seen in an awfully long time.”

“The division between the high spenders and the low spenders will be greater than we've ever seen in an awfully long time. 2009 is probably the last time we've seen a split this big,” Lovelock said.

“And it does tend to come around economic uncertainties. There are companies that either say IT is a solution to problems, and those that see IT as an expense.

“There are fewer that say it's an expense - more of them would see it as a solution or the only way out, and there's more spending from them. But then there will be this big chasm.”